At least one international ratings agency has upgraded India's credit rating.Most importantly, growth sped up last quarter for the first time since early 2016. This is a country that tends toward pretty high inflation -- which makes sense, if you look at it from a political economy perspective. Given India's inefficient state, pumping up agricultural prices is pretty much the only reliable way to transfer resources to millions of subsistence farmers. The RBI seems convinced it's going higher still.Meanwhile, even Narendra Modi can't defy India's political economy forever. Capital would then be tempted to flow out of India -- and suddenly even its external account will begin to look shaky.

Source: Economic Times January 07, 2018 23:03 UTC